Privacy & Information Security Law Blog

On September 6, 2011, a bankruptcy court approved an agreement between bankrupt bookseller Borders Group, Inc. (“Borders”) and Next Jump, Inc., (“Next Jump”) regarding Next Jump’s alleged trademark infringement and unauthorized use of Borders’ customer information.  Next Jump stipulated that it will not communicate with persons on Borders’ customer list, and that it would remove the Borders name and marks from websites that Next Jump owns or operates.

On August 31, 2011, Borders filed a complaint against Next Jump alleging breach of contract and trademark infringement, among other claims.  Next Jump, which operated a Borders website (bordersrewardsperks.com), had access to email addresses of some Borders customers who were members of Borders Rewards and Borders Rewards Plus.  According to the complaint, Next Jump violated its contract with Borders by soliciting Borders Rewards Perks (“BRP”) customers to join OO.com, a website owned by Next Jump, and by using Borders marks on Next Jump websites.  Specifically, Borders alleged that Next Jump sent emails falsely stating to BRP customers that “Borders Rewards Perks has partnered with OO.com.”  Borders also claimed that Next Jump similarly misled BRP customers by using Borders marks on its OO.com website and by falsely claiming on the bordersrewardsperks.com website that it “will be migrating to OO.com.”  The complaint stated that Next Jump continued these practices after Borders terminated the agreement between them.

The settlement agreement between Borders and Next Jump stipulates that Next Jump will: (1) disable the bordersrewardsperks.com website; (2) stop sending emails to BRP customers, including those who registered on OO.com as a result of Next Jump’s solicitation; (3) not use any data derived from the BRP customer list; (4) remove Borders marks on websites that it owns or controls; and (5) purge the BRP customer list, including those who were “migrated” to OO.com, from its systems.

This agreement comes at a critical point in the Borders bankruptcy proceedings.  The bidding deadline for Borders’ intellectual property assets, including customer lists, was September 8, 2011, just two days after the agreement was entered by the court.